The Ultimate Guide For First-Time Homebuyers · No, it’s not as easy as some people think, but...

The Ultimate Guide For First-TimeHomebuyers

A summary of everything you need to know to makethat big purchase easier

By Heather Lee BegleyYour Grand Strand Realtor© at Red Door Realty

Table of Contents

1. Preface 1

2. Where’s Your Horse? 3

3. Don’t Sweat The Small _________ 4

4. You Deserve Some Credit, If… 5

5. Are You Gifted? 6

6. Speaking Of Parents… 7

7. As Seen On TV 9

8. Find This First 10

9. Area, Area, Area 12

10. There’s No Guarantee, But… 13

11. This Isn’t Yoga 14

12. No Better Time Than Now 15

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Heather Lee Begley I Red Door Realty I 843-455-0350 I [email protected] document is copyright protected. Reproduction, in part or in whole, is strictly prohibited.

1. Preface

Thank you for requesting a copy of my booklet!Whether you’re eager and excited or nervous and not entirely convinced that buying ahome is the right move for you, this booklet will help you figure it out.Buying a home can be exciting, scary, and stressful for anyone but especially if you’regoing from renting (or living with family) to buying a home. I’d rather it be moreexciting than scary or stressful for you. It really doesn’t have to be scary or stressful, butit is for people who don’t know what to expect.No, it’s not as easy as some people think, but it’s not hard either...as long as you goabout it knowledgeably.Nowadays, there’s lots of information easily available out there. However, theinformation can be either too basic (like an infographic) or overly complex (with toomuch industry jargon). In addition, much of what’s out there lacks some of the finerdetails that I think buyers should know but isn’t often spoken or written about — andeven many agents overlook it or don’t discuss it with their clients.Even when an agent does think to bring up some of what we’ll get into in this booklet, itcan be taken the wrong way by a client in the moment. It sometimes comes across asthe agent trying to convince them to do something or not do something for their ownpersonal gain. This can lead a homebuyer to ignore even the best information andinsight they could hope for.Which is why this booklet was created -- to give you the insight in an objective way, soyou:

Can think through important things ahead of time.

Know the things you should do, and do them at the right times, before and duringthe process of buying a home to make it as smooth, successful, and enjoyable aprocess as possible.

Will expect some issues and feelings that may occur during the process so you’ll beokay if they occur and know what to do when they come up.

Ask further questions that come up while you read this booklet. (Yes, I’m totally

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approachable; I’m not just some famous author! Ha! So give me a call or shoot mean email or text, and I’ll be glad to answer any questions or concerns you mighthave.)

So, without further ado, let’s get you moving from being a renter to a homeowner!

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2. Where’s Your Horse?

This has nothing to do with buying a property that’ll allow you to own horses. It’s morealong the lines of “hold your horses” and “putting the cart before the horse.”Many buyers (even ones who’ve bought houses before) start looking for a houseonline, going to open houses, calling agents when they see “for sale” signs on the lawn,and even scouring newspapers. (Yes, some people still look in those to find houses.)However, it’s not the best thing to do. It’s like putting the cart before the horse.What they should do is hold their horses and get pre-approved for a mortgagebefore even starting to look for a house at all.Whether it’s your first house or your twenty-first house, the first thing you should do isget pre-approved for a mortgage. (Unless of course you have cash, and if that’s thecase then you know exactly how much you can spend and can give yourself thepermission to spend it.)Looking at houses without knowing that you qualify for a mortgage, and for how much,can be a waste of time as well as a total letdown in the end. So, get pre-approved soyou know what you can look for, and then go find the best house you can within yourbudget.Besides, when you do find a house you’d like to make an offer on, the listing agent andowner will want to see that you are pre-approved for as much as you are offering. Nothaving one to present to the seller wastes valuable time in a competitive market. It canalso make you look unprepared, which can affect whether they feel comfortableaccepting your offer.Getting “pre-approved” doesn’t take much time. You can do it online, but it’s better ifyou actually speak to a local mortgage professional either on the phone or face to face.You’ll need to provide them with information about your employment, assets, anddebts, so before you contact one, make sure you have a decent grasp on those things.They’ll also run a credit check, so you’ll need to give them some personal informationand allow them to do it.

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3. Don’t Sweat The Small _________

One of the biggest concerns and hurdles many renters have about becominghomeowners is the need for a downpayment. Many feel like they have too small of adown payment and couldn’t be approved for a mortgage because of that.Don’t sweat it if you only have a small down payment...True enough, for the most part you need to have some money saved to use as adownpayment and for “closing costs.” But it doesn’t usually have to be 20% of thepurchase price like it once was. That kind of down payment can be required for somebuyers, depending upon their situation, but many buyers — even ones who are notbuying their first house — put less money down.Sure, the more you put down, the lower your monthly payment will be. But waiting tobuy until you save up more money can actually cause more harm than good. It can betough saving up enough money to make much of a dent in the monthly payments,especially when mortgage interest rates are low. And if house prices are going up, youcould literally lose money by waiting and saving money.How much money you have on hand will affect how much you are approved for andwhat kind of loan makes the most sense for you, but there are plenty of options outthere.Make sure to ask your prospective lender to recommend the best loan for you andyour situation. They should be willing, able, and glad to explain the different options toyou, but sometimes they don’t think to give you all of the options when you call for apre-approval. They just crunch the numbers and give you a basic pre-approval. So,make sure to ask during that phase of the process. The earlier you know all of yourmortgage options, the better decision you will be able to make.

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4. You Deserve Some Credit, If…

If you already know that you should make sure that your credit score is in good shape,you deserve some credit just for knowing that. But if you want to truly deserve (andget) some credit, you should make sure that your credit is in good shape before buyinga house.It doesn’t need to be perfect. But the better it is, the better your mortgage interest ratewill be and the more mortgage products you’ll be able to choose from.But here’s where you get bonus points… and this is something you truly deserve creditfor if you know this...From the minute you start looking to buy a house all the way to the day youclose on your dream home, you should not make any large purchases or take onany new credit!Too many would-be homeowners go out and buy or lease a new car, open up (and use)new credit cards, or make other large purchases before they close on a house, andthey end up having their mortgage denied (or the approval amount lowered).Knowing this separates the savvy homebuyer from the novice. So, if you already knewthis, I’m impressed. If you didn’t, now you know, and you can go out there and impressany bank or mortgage representative you speak with.This is something that every mortgage advisor should be bringing up with a potentialhome buyer and every agent should be reminding buyers about. However, many forgetto bring it up; they figure someone must have told them not to do this at some point.So it gets lost in the shuffle.Even when a buyer is told, they often forget or ignore it. But you won’t. You know it. Youwon’t forget. You’re savvy!

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5. Are You Gifted?

Gifts are great to get on your birthday or the holidays, but they’re even better whenyou get them to buy a house!It’s pretty common for people to get some money “gifted” to them by mom, dad,grandma, grandpa, or even loaded Uncle Lou. (He just goes by Loaded Lou to hisbuddies, but that’s Uncle to you, especially if he’s giving you some money.)Anyhow, that’s awesome if you get money from family, or even friends, to help you buya house! However, you need to make sure you bring that up with your mortgageadvisor up front. Just because you were either promised the money or were alreadygiven it and it’s sitting in your bank account doesn’t mean the lender will be okay withit.They’ll probably be fine with it. Like I said, it’s common, but you need to let them knowahead of time. You’ll also need to document where the money came from. A lot oftimes they want the money to be “seasoned,” which basically boils down to being inyour possession for a certain period of time. They’ll also want something in writingfrom whomever gave you the money stating it’s a gift, not a loan.It might be a little awkward pushing your family or friend to give you the money aheadof time and to sign something saying it’s a gift, but it’s just how it works. So, if youanticipate having trouble getting the person lending you money to give it to you aheadof time or to put something in writing, it’s best to work on that as soon as possible.Also, there’s a difference between being promised money to help you buy a house andactually receiving it. There have certainly been some upset buyers who were promisedmoney, and it never panned out. So, it’s better to make sure you have any giftedmoney all tied up with a pretty bow in your bank account before you truly start bankingon it.

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6. Speaking Of Parents…

It’s awesome to have parents who want to look out for you in life. If you have parentswho are like that, then they’ll probably want to look out for you when you’re buying ahouse — beyond just giving you money toward the purchase.This applies to anyone, really, not just a parent. Maybe it’s a friend you turn to foradvice, or who offers you support and advice, whether you want it or not.One of the biggest problems buyers have — especially first-time and younger buyers —is having a loved one swoop in and squash their dream home. This isn’t normally doneintentionally, obviously.Let’s say a buyer looks and looks and sees tons of houses they don’t like. Or maybethey lose out on houses they love because other buyers act more swiftly. Then, theyfind one they love, and they’re ready to make an offer, but first...“I need to have my parents come take a look before I make an offer.”In that moment, every real estate agent cringes and screams just a little bit inside.However, they’ll usually just smile and hold it all inside as they say, “Of course! Noproblem!”This is because they know deep down inside that there’s gonna be a problem —probably more like a hundred problems. The parents will find and create every singleone of them, and they’ll tell their loved one they should keep looking.“Absolutely don’t buy this house! You can do better than this. Can you believe howmuch they’re asking!? They’d be lucky to get half that. The place is a total tear-down!This agent of yours showed you this…”SORRY! Got carried away. I was having a flashback.Anyhow, it’s totally fine for parents — or anyone else — to chime in on your purchase.However, they should be involved from day one, and throughout the process, not justswoop in at the last minute and add their two cents without having seen everythingyou’ve seen and knowing what you (and your agent) know about the market at thatpoint.You’ll know what you want when you see it and that it’s a good buy. They need to aswell -- by being with you throughout the process. Otherwise, they’ll just end up causing

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you to lose out on great houses until they eventually see the light — or until you get sofrustrated by them that you don’t invite them to see the house until you’ve closed on itand are hosting Thanksgiving. (If they’re still invited. Ha!)

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7. As Seen On TV

You know what’d be an awesome real estate reality show? One that shows the buyers’parents swooping in at the last minute and convincing them not to buy their dreamhome! Not sure if I’d watch it, though, because watching any real estate reality show asan agent can be pretty aggravating…Virtually every real estate show you see on TV paints a pretty picture — a prettyinaccurate one!Real estate agents know this because they live and breathe this business day in andday out. But, for many buyers, it’s like learning that professional wrestling isn’t “real”and that the wrestlers on TV are faking it. Although buyers kind of know that it can’t beas simple as they see on TV, they’re often still surprised at how different it is to actuallylook for, and buy, a home vs. what is depicted on TV.Not that there’s anything wrong with watching and enjoying those shows. They can befun to watch. Just don’t take any of it as a “how-to” because they’re probably more of ahow-not-to at times. The home-buying process, as well as the housing market itself,vary greatly from one area of the country to another and even on a regional level.That said, there’s one thing that’s pretty universal: No buyer ever went out and sawthree houses, then went and had a drink and some appetizers because they had a “lotto think about and talk over,” and then came to a decision on which of the threehouses was right for them. Oh, and then made an offer, got it accepted, closed andmoved in — all without a hitch.That’s not how it works. That’s not how any of this works...So feel free to binge watch away, but always remember that what happens on TV stayson TV.

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8. Find This First

Many buyers are more concerned about finding the perfect house than finding thebest real estate agent to work with.They figure they know what they’re looking for and that they’ll know it when they findit. (Especially nowadays since it’s so easy to search for houses online.) And once theyfind the perfect house, they’ll make an offer, negotiate back and forth a little bit, andsign some papers. What does an agent really even do, anyway?Lots. More. Than. Most. People. Realize.Coming from a real estate agent, I know that probably sounds pretty self-serving. Butit’s the truth. Also, while every agent does more than most consumers think, not everyagent is the best real estate agent to work with. Some are better than others.Considering that you don’t have to directly pay whichever agent represents you as abuyer on the house you buy (since the seller pays the commission), you might as wellchoose the best agent someone else’s money can buy!While finding your dream house may be easier in some ways nowadays, a great agentcan help to make sure you find the best home for your wants and needs -- and help youget it for the best possible price.So, make sure you find an agent who:

Listens to your wants and needs

Responds readily and doesn’t disappear for days on end

Knows the industry inside and out and isn’t just a tour guide and door opener

Is a strong negotiator

Knows how to analyze and explain the market and house values to you

Can manage other people well (there are a lot of people involved in a purchase,and people can fail to do what they’re supposed to)

Helps you avoid issues and problems, but can put out fires when necessary andnot lose their cool

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Is focused on your needs more than their commission check

The point is, put as much thought on finding the best agent as you put on the houseyou want to buy.

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9. Area, Area, Area

You’ve probably heard the old real estate adage “location, location, location.” If not, itbasically means that the most important factor in the value of real estate is location.You can have three exactly similar houses, all in entirely different locations, and thelocation will be what makes one worth more or less than the others.So, yeah, location is important, and it’ll affect the value of homes you consider as wellas the future value and appreciation of the property. Definitely keep that in mind. Butfor most people, the more important thing to concentrate on is “area, area, area.”Choosing the best area to live in should be given as much if not more considerationthan the house you buy. You can always upgrade a house more easily than you canchange the area you live in.What matters to you about an area will vary entirely from what matters to someoneelse. There is no right or wrong answer to this. It’s more of a soul-searching kind ofthing. So, what matters to you? Here are a few questions to get you started:

Do you commute? If so, how long are you willing to drive?

Do school rankings and reputations matter to you? Will they in the future?

Do you want to live close to the ocean, out in the country, or something more inbetween?

Once you have a decent handle on what you want, try to focus on the type of area youwant to live in more so than the house. It can be more tempting for first-time homebuyers to buy a nicer house in an area they don’t love than to buy a house they don’tlove in an area they’d rather live in. That usually leads to someone being less happythan they expected.

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10. There’s No Guarantee, But…

A huge concern for any homeowner, not just first-time home buyers, is they’ll buy ahouse and something will go wrong with the house after they buy it. You know, like theroof leaks, the furnace or air conditioning stops running, a pipe bursts, or appliancesbreak. This can be even more concerning to a first-time buyer since they’ve often tiedup a larger percentage of their savings into the purchase of their house.It’s a legitimate concern, so you’ll want to hire a home inspector to do a thorough homeinspection. He or she should catch anything that’s an obvious problem or one that willlikely occur in the near future. However, an inspector can miss things. Things happento houses even when someone has been super careful about looking for potentialissues. There’s no guarantee that something can’t or won’t happen to your home onceyou own it.However, there can be a warranty!Unexpected home repairs can be costly, putting someone in a tough spot. It’s great ifyou’re handy and can do things around the house, but some things requirespecialization and can still be costly in terms of materials and equipment, no matterwho’s doing the work.So, it can be a smart move to buy a home warranty. A home warranty will cover thingsthat go wrong with your house. You’ll have to pay a small fee (which varies fromcompany to company and plan to plan, but let’s call it $50 for our purposes here) tohave someone come out and check on the problem. But that’s it. If they can fix it, great!If not, they will replace it.You need to make sure you read through what the warranty covers when you’rechoosing one.If you happen to purchase a home that is listed with our office, we will provide a homewarranty for 1 year.

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11. This Isn’t Yoga

There’s nothing better than a good stretch after sitting for a few hours straight, right?Or after you’ve woken up for a nice sleep… Or had an amazing yoga session…Stretching your body can feel great and be great for you. But stretching your budgetwhen buying a house? Not so much. Stretching how much you spend on a house willneither feel great or be great for you in the long run. (Probably not even in the shortrun.)But it’s tempting for many buyers to do. It’s too easy to just look at houses a little bithigher in price instead of choosing the best one you can in your price range.This is something that happens in every price range. A $1,500,000 buyer will be equallyas tempted to stretch to $1,750,000, as a $150,000 buyer is to stretch to $175,000. It’sall relative, but everyone tends to want a little more than they can afford.It doesn’t help that mortgage approvals are often for more than someone shouldprobably spend. So pay close attention to not only how much you’re approved tospend, but also how much it will cost you per month! That’s probably the moreimportant number to be concerned with because the price of a house is only part ofthe equation. Taxes vary from one house to another; two houses with equal prices maycost you entirely different amounts per month. Homeowner's Insurance can vary wildlydepending on location...and don't forget about those HOA fees if you're buying in oneof the many lovely developments our area has to offer.Very few people ever regret spending less than they could have, but almost everyonewho spends more than they should have will end up regretting it. And it can be morethan regret; it can lead to financial stresses that cause lots of problems. So, set a capon how much you can and will spend per month, and stick to that amount or lower,and you’ll be fine.

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12. No Better Time Than Now

A pretty common question people have is whether it’s a good time to buy a house.When this happens, there are plenty of agents who will always say, “Now’s a great timeto buy a house!” If you’re around enough of these conversations, it can sound like it’salways the perfect time to buy a house!The truth is, there’s never a perfect or great time for everyone to buy a house. There aretoo many factors to consider for there to be a universal answer. It depends upon theprice range the person will be buying in, the area(s) they’re considering, and, mostimportantly, their personal situation.That said, in many ways it doesn’t get any easier to buy a house than your first one.That’s not to say that it’s always easy and there won’t be some hiccups or hurdles, butcompared to someone who already owns a house, buying one when you don’t ownone is much easier.You have more flexibility than someone who owns a house because they most likelyhave to sell the one they already own before buying another one. They have to worryabout the timing of the closing on the house they’re selling and the one they’re buying.This limits their choices and their ability to be patient.Enjoy and capitalize on this as much as you can!(By the way, the word around the watercooler at the office is that now actually is agreat time to buy a house...have you seen interest rates lately? So let’s get this show onthe road, shall we? Ha!)

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Pro tip: Truly figuring out when the best time to buy is a matter of some analysis.It takes looking at the current market and looking back at past trends in the area.With a careful look and a trained eye, sometimes you can find that there arebetter times of year in an area to buy a house. But the reality is, there are alwaysgood homes to buy throughout the year. There just tends to be busier times ofthe year when there’s more listing and buying activity. But sometimes you canactually find a better house, and get it for a better deal, in times of the year otherpeople aren’t focused on looking. So, to me, it’s better to look for and buy a homewhen you’re ready, not when the market is hot or not.

Compliments of:

Heather Lee Begley

Red Door Realty

Your Grand Strand Realtor®

843-455-0350

[email protected]

You can't get more native to the Grand Strand thanbeing born at Ocean View Memorial Hospital on OceanBoulevard to parents, grandparents, and great-grandswho all lived within a block of the shore. My father wasraised in Aynor before meeting my mother in MyrtleBeach. My great-great-grandfather (on my mother'sside) had a dining table handcrafted in Georgetownand floated up the Waccamaw River to his home inConway as a gift to his new bride in 1900. My roots rundeep in this area, no doubt, but I've also been blessedto have lived in California, Florida, Georgia, Virginia,and even Mexico.

Of course, for me, there's no place like the GrandStrand, but these vast experiences have given me aunique perspective and an appreciation for the manycultures that make up the fabric of our nation. I'm ableto use my deep local knowledge & eclectic backgroundto connect with & serve my clients in a way otherscannot. Whether you're relocating, buying for the firsttime, investing, or needing to sell your property, Iwould greatly appreciate the opportunity to work withyou.

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